Rackspace Email Prices Skyrocket 706% for Partners

Rackspace Technology is significantly increasing the prices of its email hosting services, a move that has been described as "devastating" by long-term partners. Effective March 2026, the standard plan will cost $10 per mailbox per month, a substantial jump from previous rates. Reseller partners, such as Laughing Squid, reported being notified of price hikes as high as 706%, with only a month and a half's notice.

These abrupt changes have severely impacted reseller partners, who relied on previously negotiated pricing structures. Laughing Squid noted that email has become their largest expense, jeopardizing their profitability. Reports indicate increases ranging from 110% to nearly 500%, with new quotes often excluding previously available volume discounts. This situation creates significant challenges for businesses that depend on these services.

A Rackspace spokesperson stated the increases are necessary to continue delivering expected service levels and to maintain its mission of providing reliable hosted email solutions. However, the email hosting market is increasingly complex and low-margin, leading some companies to focus on higher-value managed services. The price hike coincides with broader computing component shortages and Rackspace's withdrawal from Microsoft Exchange hosting after a major ransomware attack in 2022.